Overseas LED chip companies followed the LED tide, joining into the fierce competition in Chinese LED lighting market one by one. LED chip prices will be reduced again. It is the third price dropping of LED street light chips within past five years. How domestic LED chip manufacturers cope with such serious situation?
Taiwan chip giant landed on China
At present, our LED chip industry still in the stage of developing. More and more LED enterprises start to co-operate with domestic LED chip manufacturers or set up their own chip manufacturing departments. But, Chinese currently used LED chip technologies are all borrowed from foreign chip companies. Lacking of our own chip developing and manufacturing technique is the biggest defect of us. In the intelligent electrical apparatus market, Chinese companies were continuously at a disadvantage in competitions with overseas rivals. Foreign chip giant has aimed at LED lighting market, racing to provide their LED chips for LED CHINA manufacturers. According to experts’ statistics, LED chips will probably be an independent market in near future. Chinese LED designers are striving to invent their own chips to face up this war.
Since the 2009, the high demand of LED lighting products is far beyond their expectation. Gradually, they realized that they are biting off more than they can chew. Finally, Taiwan LED distributors looked to the Chinese market then, entering into mainland market though the co-operations with domestic enterprises or set up their own epitaxial factories.
Overheated investment leads to prices reduction in Chinese LED chip market.
The number of MOCVDs sold to China in 2011 in is occupied over 50% of the global MOVCD supply in 2010. In this case, after three years, the yield of epitaxial factories will be 10-15 times as much as right now. Over 1/3 traditional lighting enterprises have entered or prepare to enter this battle, actively seizing the market. As for them, LED lighting industry is just a part of their strategies. In next few decades, it will become a key development direction. In order to prevent being controlled, they chose and have such capability to develop their own LED chips. This undoubtedly makes things even worse. With the continuous release of capacities, chips for white LED applications had to drop prices again in August this year. The average drop is around 25%. 1W LED chip only costs 1 USD.
